Financial Post, Weekly edition,
Thu 08 Jun 95,
page 4

IMF MAY SELL PART OF GOLD HOARD: Proposal expected to be
resolved ahead of Halifax summit, where G-7 leaders will look at
overhaul of international financial agencies.

Alan Toulin

A proposal to sell a portion of the gold reserves of the
International Monetary Fund has not yet been agreed to by the
leaders of the seven major industrial countries, said senior
Canadian officials.

But, the issue of IMF gold sales will have to be resolved by the
G-7 leaders at the Halifax Summit next week, said the officials who
spoke on the condition of anonymity.

Canada favors such gold sales into the world market as a way of
freeing up more financial resources for the 15 or 20 absolutely
poorest countries in the world.

Canadian officials said the proposed sales - representing perhaps
3% to 5% of the IMF's gold holdings - would not have a major impact
on world gold prices.

''It would be such a small amount and it would occur over a period
of time so there wouldn't be any major impact on the position of
Canadian companies,'' said one official.

A review of the working of international financial agencies such as
the IMF, the World Bank and the various specialized development
banks is on the agenda for the G-7 leaders in Halifax.

Prime Minister Jean Chretien has been pushing for such a review of
institutions which were created 50 years ago at the Bretton Woods
conference at the conclusion of the Second World War.

''After all, 50 years have passed and it is time to look at the
institutions which have, in fact, changed significantly,'' said one
official.

''Partly it's a recognition that as a result of globalization,
particularly with respect to the international monetary system,
there have been radical changes since the IMF was created,'' the
official said.

The G-7 leaders want to strengthen the ability of the IMF to deal
with currency crises such as the one that hit the Mexican peso last
December.

The leaders want the IMF to develop an early warning system of
potential crises and they want a new financing mechanism available
to respond quickly to a de-stabilizing run on a currency.